European Stock Markets: Caution at Opening, Calm in the Bond Market

Futures contracts indicate a 0.07% decline for the CAC 40 in Paris and a 0.01% drop for the DAX in Frankfurt, while the FTSE in London may gain 0.02%. Markets are regaining calm after starting September in a gloomy atmosphere, characterized by a massive sell-off of long-term bonds worldwide. In France, Prime Minister François Bayrou faces a significant risk of being ousted by a confidence vote next Monday amid budget cuts, which has pushed the spread between the German Bund and the French OAT to over 80 basis points. Traders are focused on upcoming U.S. labor market data to assess the Federal Reserve's next decision, with a rate cut this month now almost fully priced in. Additionally, developments in trade policy have captured attention after President Trump urged the Supreme Court to expedite its review of his appeal to overturn last week's ruling that deemed most tariffs illegal.